Methyl Tertiary-Butyl Ether (MTBE):Conditions Affecting the ...

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Table 3-9 U.S. imports of reformulated gasoline, by sources, 1994-98 (1,000 barrels per day) Source 1994 1995 1996 1997 1998 Canada .................................... 3.3 48.3 67.8 67.1 61.1 Venezuela .................................. 1.3 29.4 40.9 48.4 52.0 Netherlands ................................. 0 6.4 1.4 12.0 9.1 Saudi Arabia ................................ 0 4.9 12.2 14.7 8.1 All other .................................... 5.1 11.8 14.5 5.9 5.8 Total .................................. 9.9 106.6 154.3 164.5 158.4 Source: Compiled from official statistics of the U.S. Department of Commerce. that purchasers do not distinguish between imported and domestic MTBE. 51 By design, purchasers tend to mix acquisitions by utilizing both the spot market and contracts of varying length, allowing them to switch suppliers depending on price. 52 Price Trends MTBE prices fluctuate substantially throughout the year (see table 3-10). However, two longer-term price shifts are worth noting. One is the increase from $25 to $45 per barrel during March-November 1994. This increase derived mainly from an independent rise in methanol prices, which was, in turn, the result of production problems that reduced supplies while methanol demand continued to grow. However, even after methanol prices declined, MTBE prices stayed high as MTBE demand remained strong, particularly given the implementation of the Federal RFG program in 1995. The second major longer term shift in MTBE prices was the decline from $39 to $20 per barrel during August 1997-December 1998. Industry sources report that MTBE prices tend to be closely associated with crude petroleum prices, 53 and relate this particular decline to a parallel decrease in the price of crude petroleum following the onset of the Asian financial crisis in mid-1997. 54 The Asian countries most affected by the crisis represented significant markets for crude petroleum, and the zero to negative growth of the gross domestic product in some of these countries reduced the global demand for crude petroleum, contributing to a 37-percent decline in the price of crude petroleum during 1997-98. 55 51 Ibid. 52 Ibid. 53 DeWitt & Co., MTBE and Oxygenates, p. 6. 54 Telephone discussions with industry sources, May 16, 1999. 55 Domestic first purchase price. U.S. DOE, Monthly Energy Review, Apr.1999, p. 111. 3-15
Table 3-10 Average monthly and annual U.S. gulf coast MTBE spot prices, 1994-98 (per barrel) Period 1994 1995 1996 1997 1998 January ........................................ $25.65 $40.13 $36.65 $36.09 $30.95 February ....................................... 25.38 38.14 32.19 33.08 30.40 March ......................................... 24.93 29.27 34.31 33.00 26.21 April ........................................... 27.27 32.55 37.59 31.75 26.72 May ........................................... 28.81 39.46 34.34 32.68 28.82 June .......................................... 32.18 38.12 31.40 33.47 27.97 July ........................................... 36.12 36.17 32.30 38.60 28.67 August ......................................... 39.00 35.55 34.91 38.72 26.49 September ...................................... 38.80 32.00 35.04 35.24 26.23 October ........................................ 44.10 29.21 37.23 36.96 26.38 November ...................................... 45.40 33.44 36.02 37.35 26.20 December ...................................... 43.32 37.72 35.94 32.91 19.82 Average annual .............................. 34.08 35.15 34.82 34.99 27.07 Source: Platt’s Oilgram Price Report and Platt’s Oilgram News. Several U.S. producers say that MTBE prices are still declining in 1999. Whereas some have stated that this trend has generally resulted in decreasing profit margins, 56 others reported “solid” profit margins in mid-1998. 57 One industry source notes that profit margins have declined since 1995, but states that they remain positive for the industry as a whole, although too low to encourage new capacity construction. 58 Table 3-11 presents data on unit values of imports, on a landed duty-paid (LDP) basis, 59 from the top five sources during 1994-98. These sources accounted for over 80 percent of U.S. MTBE imports. The LDP unit values include a 5.5 percent tariff applied to imports from 56 USITC fieldwork in the United States. 57 “Stable Feedstock Prices Provide U.S. MTBE Producers With Solid Margins,” Platt’s Oilgram Price Report, July 21, 1998, p. 10. 58 DeWitt &Co., MTBE and Oxygenates, p. 7. Profit margins are one of several factors discouraging the construction of new capacity. 59 The LDP value of imports is calculated as follows: LDP value = customs value + charges, insurance, and freight + calculated duties collected. The United States assesses import duties on the customs value of imports, which is conceptually similar to the exporter’s f.o.b. (free on board) value. “Calculated duties collected” are derived by applying the published duty rates to the customs value. LDP unit values and customs unit values are derived by dividing LDP values and customs values by the appropriate unit of quantity for a particular product, when available. In principle, the LDP unit value should be a reasonable proxy for prices paid by U.S. consumers of imports, since it includes insurance and freight costs and tariffs (but not shipping from the port of entry). 3-16
Page 1 and 2: Methyl Tertiary-Butyl Ether (MTBE):
Page 3 and 4: ITC READER SATISFACTION SURVEY Meth
Page 5 and 6: U.S. International Trade Commission
Page 8 and 9: TABLE OF CONTENTS iii Page Abstract
Page 10: Tables-Continued TABLE OF CONTENTS-
Page 13 and 14: accounts for about 30 percent of U.
Page 15 and 16: volatile organic compound emissions
Page 17 and 18: gases in Saudi Arabia regardless of
Page 19 and 20: Register (64 F.R. 5312) of February
Page 21 and 22: eportedly purchased imported MTBE d
Page 23 and 24: Table 1-1. The four main sources of
Page 25 and 26: Table 2-1 MTBE production levels of
Page 27 and 28: Saudi Arabia, 13 Venezuela, the UAE
Page 29 and 30: The third group of countries, the m
Page 31 and 32: (1) in refineries using either thei
Page 33 and 34: production capacity is fairly recen
Page 35 and 36: Table 3-2 31 (...continued) In the
Page 37 and 38: Table 3-3 The cost of producing MTB
Page 39 and 40: accounted for approximately 94 perc
Page 41 and 42: exploring their options regarding a
Page 43: Table 3-7 U.S. MTBE import-to-consu
Page 47 and 48: Table 3-12 Components of LDP unit v
Page 49 and 50: Transportation Costs Practically al
Page 51 and 52: Source: Compiled by the Commission
Page 53 and 54: the section describes health and en
Page 55 and 56: volume, 90 and contain no lead or h
Page 57 and 58: that opted in to the program, 112 m
Page 59 and 60: appendixes H and J). In addition, t
Page 61 and 62: prohibit the use of jet skis and, i
Page 63 and 64: produce disruptions in the fuel sup
Page 65 and 66: According to one source, the “vol
Page 67 and 68: level almost reached the record hig
Page 69 and 70: Europe consider ethanol to be too c
Page 71 and 72: TAME is produced in about five to s
Page 73 and 74: our continued economic growth.” 4
Page 75 and 76: with $5.5 billion in 1996. 17 As of
Page 77 and 78: Port in Madinat Al-Jubail. 35 Both
Page 79 and 80: Alujain was to have held about 30 p
Page 81 and 82: (presented in descending order). 59
Page 83 and 84: Using minimum estimated operating r
Page 85 and 86: The cost of producing MTBE from n-b
Page 87 and 88: Table 4-3 Butane dehydrogenation pr
Page 89 and 90: consumed domestically “as fuel an
Page 91 and 92: price would be determined by deduct
Page 93 and 94: Government Policies This section pr
Page 95 and 96:
e available to all sectors in the K
Page 97 and 98:
intent of the investment condition
Page 99 and 100:
that “this is only a limited cush
Page 101 and 102:
In another argument, several source
Page 103 and 104:
Opinions within the industry differ
Page 105 and 106:
4-34
Page 107 and 108:
Appendix C Witness List
Page 109 and 110:
Appendix D Glossary
Page 111 and 112:
Gulf Cooperation Council (GCC)-the
Page 113 and 114:
D-4
Page 115 and 116:
MTBE Production Processes STEAM CRA
Page 117 and 118:
Figure E-2 is not available in the
Page 119 and 120:
dehydrated to form isobutylene) or
Page 121 and 122:
Appendix F U.S. Production and Cons
Page 123 and 124:
Table F-1 U.S. methanol producers,
Page 125 and 126:
Table F-3 U.S. methanol production,
Page 127 and 128:
increased during this period; Canad
Page 129 and 130:
another 3 to 5 percent is reportedl
Page 131 and 132:
2 percent. This growth rate was in
Page 133 and 134:
Table F-6 Annual production of liqu
Page 135 and 136:
Table F-7 U.S. annual production, t
Page 137 and 138:
Appendix G U.S. Tariff Treatment an
Page 139 and 140:
Appendix H Chronology of Events Rel
Page 141 and 142:
Year MTBE-related incidents, academ
Page 143 and 144:
Chronology of Events Related to the
Page 162 and 163:
Appendix J Legislation and Other Ac
Page 164 and 165:
Jersey introduced legislation that
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